Do too many labels kill labels?

You’ve probably asked yourself this question at least once: “But why are there so many labels and brand logos on this bag of grated Italian cheese or on this bottle of milk?”

grana padano labe

Four logos for one product.

It is rare today that only one brand name appears on a product. Some names are added as a guarantee signal; for example, the brand name of a manufacturer such as Danone (Dannon) or Nestlé, or that of a retailer when it is a private label product. Other names are regulated collective marks such as the Label Rouge (Red Label), the AB logo, the Protected Geographical Indications (PGI)… Finally, some labels are private (Fairtrade or Max Havelaar).

This phenomenon has not escaped a group of researchers (Ivan Dufeu, Jean-Marc Ferrandi, Patrick Gabriel and Marine Le Gall-Ely). A study published in Recherche et Applications en Marketing measured the effects of the progressive addition of the Agriculture Biologique (AB), Fairtrade and Label Rouge (LR) labels on the willingness to pay of 519 French consumers of honey. These three labels have the advantage of being of comparable reputation, while revealing different qualities.

Redundancy or complementarity?

The results of this study show a complementarity effect superior to the proven effects of redundancy and information overload.

“The addition of these credible and recognized labels is not counterproductive (even if the increase in willingness to pay decreases with the number of labels) and there are potentially strong synergies in the associations.”

The Label Rouge is the one that benefits most from an association with other labels, while associating the AB label with other labels is of less interest.

The lessons of this research encourage producers to associate several labels on packagings when they are consistent in terms of reputation, and complementary in terms of revealed qualities. The results are all the more striking in that they do not depend on the socio-demographic characteristics of the respondents or their consumption and purchasing habits, and are not linked to a specific product brand.

To weigh the pros and cons

Does this mean that it is still in the interest of a producer to invest in an additional certification? Will the additional costs of this certification be offset by a possible increase in the selling price? Yes, according to the researchers behind this study, but under certain conditions:

  • When the producer is involved in a specific market such as organic or fair trade;
  • When the marginal cost of acquiring additional labels is decreasing; this is the case for honey, given the redundancies between the specifications of the three labels considered, but also for other products for which the labels share common constraints—eggs, chocolate, coffee, meat, cookies, etc.

And if you stay on your hunger (of honey), follow this link:

Dufeu I., Ferrandi J-M., Le Gall-Ely M. (2017), Socio-environmental multi-labelling and consumer willingness to pay, Research and Applications in Marketing, 29(3), 35-56.

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